Caspian Report - Issue 06 - Winter 2014

Commission will monitor adherence
to the recommendations in a publicly
available scoreboard, which will be
used to review the effectiveness of
the voluntary approach in 2016. The
International Association of Oil and
Gas Producers said the guidelines are
“a step in the right direction” .8
Thus it is possible to say that in spite
of new gas agreements with Russia,
shale gas production is developing in
Ukraine without any serious risks. It
is doubtful that the Ukrainian government
will slow down its cooperation
with transnational energy companies,
as they are the biggest investors in
the Ukrainian energy sector, which
urgently needs modernization.
Development of deep sea shelf gas
production: Another possible route
to Ukrainian energy independence is
deep sea gas production. One of the
most promising gas fields is Scythian
(close to the Romanian border). The
Scythian field is enormous (16,698
square kilometers) and adjacent and
geologically similar to where Exxon-
Mobil and OMV are exploring off Romania’s
coast.
The PSA between ExxonMobil, the
Texas-based oil giant (the consortium
also includes Shell, OMV) and
the Ukrainian government (Nadra
Ukrayiny) is being prepared and is
supposed to be signed in the first half
of 2014 (previously planned for November
2013). The signing of a gas
PSA between Ukraine and an international
consortium led by U.S. major
Exxon Mobil has been postponed
for the second time in a row due to
mass anti-government protests in
Ukraine and political crisis. From
UKRAINE IS ESTIMATED TO POSSESS THE FOURTH-
LARGEST SHALE GAS RESERVES IN EUROPE.
the start of the project, the amount of
the gas produced in Ukraine’s shelf
can reach to 4 bcm in coming 3-5
years. ExxonMobil will spend $735
million drilling two deep-water oil
wells off Ukraine’s Black Sea coast. 9
The number of foreign companies
that are coming to Ukraine’s shallow
sea shelf is also increasing. Italian
Eni has already put in request for the
production of oil and gas on the shallow
Black Sea shelf fields.
Ukraine is estimated to possess the
fourth-largest shale gas reserves in
Europe. The planned exploration
projects in Ukraine are by attempt
of the country to rid itself of energy
dependency on Russia and to create
a balanced energy diversification of
gas supply.
Deep sea shelf gas production will
be the fastest way for Ukraine to increase
domestic gas production. It
could launch a new wave of shelf gas
production in the Black Sea region.
LNG terminal project: In view of the
importance of gas import diversification,
the Office of the President of
Ukraine established the Ukrainian
LNG Terminal National Project to
51
CASPIAN REPORT, WINTER 2014
8
. http://www.europeanvoice.com/article/2014/january/eu-unveils-shale-gas-guidelines/79361.aspx
9 .
. Tale of two seas may be key to Europe’s future - http://www.thenational.ae/business/energy/
tale-of-two-seas-may-be-key-to-europes-future